Florida sees growth of 'dark money' political groups
BY MARY ELLEN KLAS Herald/Times Tallahassee Bureau
Political groups that have formed new “dark money” organizations in Florida to shield political spending from public view include nursing home operators, marijuana promoters, Tea Party affiliates, former Congressman Allen West and a host of secretive groups, according to a new analysis from MapLight, a nonpartisan research organization.
The Florida data, obtained by the Herald/ Times, reveals that the number of tax-exempt political players has more than doubled, to 155 from 67, since the U.S. Supreme Court’s 2010 ruling on Citizens United. Together, these politically potent nonprofits raised more than $13 million in Florida from unidentified sources in their last reported tax year.
The numbers track the national trend that shows that 60 percent of all politically active social welfare organizations were created after the Citizens United ruling allowed corporations, labor unions and individuals to shield their political spending by using the IRS’ 501(c)(4) tax code, the MapLight report found.
This undisclosed political spending is known as “dark money,” and it has become an increasingly powerful force in state and national elections along with super PACs, because they can raise unlimited amounts of cash from corporations and wealthy individuals.
But, unlike super PACs, the nonprofit groups do not have to disclose their contributors or detail their political expenditures. A summary of the report is found on the website.
To qualify for the exemption from disclosing political spending, the groups must certify that they are a nonprofit, operate with a social welfare purpose and vow not to spend more than 49 percent of their activity influencing voters. Since 1939, the IRS has granted tax-exempt status to 3,867 politically active nonprofits in the U.S., but 2,316 of them were formed in the six years following Citizens United, the MapLight analysis found.
“Dark money undermines our democracy by depriving voters the ability to know who’s influencing their elected officials,” said Daniel G. Newman, president of MapLight, who formed the nonprofit to track political spending.
These “dark money” groups spent more than $257 million in anonymous donations on ads, phone calls and mailings in the 2012 federal elections cycle , compared to $86 million in the 2008 cycle, the report found, and the trend has continued this election cycle.
Politically active social welfare organizations reported $3 billion in total revenues during the organizations’ latest tax years, MapLight found, and nonprofits established after January 2010 reported raising one-quarter of that, almost $750 million.
“If you are an individual, corporation or labor union and you donate to a nonprofit, you are not disclosed to the general public; you are disclosed to the IRS, but the public doesn’t see that,” said Suzanne Robbins, an associate professor of political science at the University of Florida who studies campaign finance.
She said she expects that Florida’s high-stakes U.S. Senate race this year “is going to attract a lot of attention from outside groups, so I would expect a lot of activity” from both super PACs and “dark money” organizations.
Of the 88 politically active new organizations in Florida identified in the report, some include groups that already had a political presence in Tallahassee, such as nursing home operators, eye doctors and activists for gay and lesbian rights. But after Citizens United, many of these groups, as well as others, created new nonprofits.
“Many of these groups are being saavy in the sense they want to have all the tools,’’ said Robbins of UF. “Whether they use them or not is the question.”
Nursing home owners and operators created “Our Florida Promise,” a Tallahassee-based nonprofit established “to enhance the ability of Florida Health Care Association to properly and successfully impact the legislative process,” according to the group’s website.
The group raised $280,108 in contributions from unknown sources in its last reported tax year at the same time the industry was also raising money for more transparent political efforts. A Miami Herald/Tampa Bay Times analysis found that nursing home companies and their affiliates contributed nearly $3.5 million to state political campaigns between November 2012 and February 2014.
The nonprofit newcomer with the largest receipts, according to MapLight, is the Florida Optometry Eye Health Fund, which reports raising more than $799,000. According to its IRS records, it gave $200,000 in 2013 to its political committee that year while more than $300,000 of the money it reported went to charitable causes. The next largest nonprofit is Equality Florida Action Inc., the group that advocates for gay and lesbian rights. It raised more than $476,000 in its last reporting year.
Other players emerged with vague names and little or no indication of who is behind them.
The Jacksonville-based “America is Not Stupid, Inc.” raised $190,000 in its last tax reporting year. Its national organization was best known for a 2012 election ad featuring a talking baby who compared the smell of his diaper with a Montana senator.
ProPublica, the online investigative journalism site, revealed in 2013 that “America is Not Stupid” and its affiliate “A Better America Now” spent more than $125,000 on mailers and ads opposing Democratic candidates in Texas and Montana.
A nonprofit group called Political Accountability in Florida raised $125,000. It is registered to Coral Gables political consultant Jon Adkins.
Florida’s Next Leaders Inc. is a nonprofit formed in 2013, and it raised $65,000 in its last year. It is based in Tampa but among its officers are Ellen Freidin, the Miami lawyer who steered the Fair Districts redistricting campaign, and Democratic National Committee member Carlos Odio of Miami-Dade.
Florida For Care, the organization advocating for the passage of Amendment 2 to legalize the use of marijuana for debilitating medical conditions, is another new nonprofit using the law to shield its donors. It raised more than $189,000 in its last reporting year and did not have to reveal its donors.
The nonprofit Allen West Foundation was formed with $420,000 from the former congressman’s failed congressional campaign as well as $245,000 from the nonprofit American Legacy Guardians. The fund raised another $182,321 from donors in its latest tax reporting year, according to the IRS, but it has not disclosed its contributors or spending.
A handful of Tea Party groups are on the list but have not raised large sums in the last year. First Coast Tea Party in Jacksonville reports revenues of $33,500. The National Liberty Federation of Palm Beach Gardens reports $13,174 in revenues. Volusia 912 Patriots reports $8,211.
Progress Florida, the left-leaning policy advocacy group based in St. Petersburg, reported raising $70,700.
The Florida Conference of Catholic Bishops is also listed as politically active by MapLight, having raised $373,433 in its last reporting year. The group’s executive director, Michael Sheedy, lobbies on behalf of the organization and the Florida Catholic Conference before the Legislature and executive branch.
Donald Tobin, dean of the University of Maryland’s Carey School of Law and an expert in campaign finance law, told MapLight that the increase in the number of politically active nonprofits “probably has as much to do with the fact that it is clear that the IRS is not enforcing the ‘primary purpose test,’” so campaign operatives create social welfare organizations to shield donors from disclosure without having to worry about enforcement from either the IRS or the Federal Elections Commission.
But James Bopp Jr., the Indiana lawyer who represented the conservative nonprofit Citizens United before the Supreme Court, told MapLight that the growth in 501(c)(4) groups has nothing to do protecting donors’ identities and that he believes the concerns about the high court’s ruling are “overblown.”
Other groups use the IRS designation but claim they are not politically active.
The Florida Research Institute for Governmental Studies is listed as a “research institute in Miami” whose chief officers are former state Sen. Alex Villalobos and the Tallahassee lawyer for the teacher’s union, Ron Meyer. The organization raised $127,500 in 2014.
Villalobos said the money comes from the Florida Education Association’s development fund money and pays his law firm for his legislative research and consulting.
“I do research for several organizations, and the money is not used to do any fundraising, or to do anything political,” he said.
There are “two uses” for the 501(c)(4) organziations “that are clearly distinct,” Villalobos said. “There are some that actually do work — such as research, like I do — and the other which is used to hide all this money that you get from god knows who and spend it on god knows what.”
The data also shows that, while only 33 of the new politically active organizations raised money in their last reported tax year, those that were active raised $4 million in Florida. However, the 67 nonprofits that were politically active before Citizens United raised about $9 million, MapLight found.
Among that group the largest operator is Able Force, Inc., a nonprofit dedicated to expanding opportunities for the disabled. It raised more than $4 million
The next largest is the Foundation for Florida’s Future, the fund created and chaired by former Gov. Jeb Bush to “make Florida’s education the model for the nation.” It raised $1.1 million in its last tax report.
Mary Ellen Klas: and @MaryEllenKlas